I like these guys (bank economists). They don’t pull any punches, they tell it like it is and for the most part, they talk in language that everyone can understand.

We heard (what we all really knew) that the USA is still precariously fiscally balanced. Cameron used the analogy of a household budget to explain, they have:

an income of $23,000

outgoings of $35,000

credit card debt of $12,000

and only $385 in savings!

As I said, precarious.

In Europe, it’s more of the same; Cameron says their economic models are basically flawed. In the Eurozone, the economic architects and power houses are Germany & France (who have not been the best of friends for the past 1,000 years). On top of that, they have differing money psychologies. On one hand Germany says, we have to save money before we spend it (makes sense) and on the other, France, which has a Balance Sheet in tatters, has just lowered the retirement age so people can get to the dosh sooner [that the govt doesn’t have]!

There are 17 member countries in the Euro, most with wildly differing money psychologies. Cameron likened it to one dog trying to herd 17 sheep into a pen – and to make matters worse, five of the sheep think they’re dogs!

Here’s the thing: self interest dominates group interest. While that attitude pervades, there is no magic bullet for the Euro or the US or for anyone else for that matter.

But don’t get complacent. New Zealand isn’t too flash either! We have a net external debt that is 70% of GDP and we have a household saving rate of a big fat ZERO.

As a nation, households spend on average $1.06 for every $1 we earn (ref: Cameron Bagrie).

What does this say about the average Kiwi’s money mindset? It looks as though self interest is taking over and we’re behaving like a spendthrift. It’s also a sign that we are stillafter instant gratification.

How do we change this habitual spending?

First, we have to recognise that our behaviour is based on our beliefs. These beliefs have evolved from our childhood. So, before we can change our behaviour, we have to change our beliefs.